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Thursday, 21 April 2011

Mapletree Commercial Trust

Mapletree Commercial Trust ("MCT") is offering 712.894m units at $0.88 per unit subject to over-allotment. The IPO will close on 25 Apr at 9am.

MCT is a commercial REIT and offers 3 properties, namely Vivocity, Harbourfront and PSA building in its initial portfolio.  There is a strong pipeline likely to be injected into MCT, such as Mapletree Business City, Mapletree Anson, Mapletree Lighthouse etc.  The yield is projected at 5.7% for FY11/12 and growing to 6.2% for FY12/13.  

Basically this is a REIT and a yield play. The positive thing is that the properties are located in Singapore and hence not subject to significant forex exposure, however, investors should be aware that any properties being ├»njected" will also be made at current market value and will earn the manager some 'performance fees'.    

The market cap of MCT will be S$2.82 billion at IPO and it made a net income of $78m in FY March 2010.  The cornerstone investors are AIA, Itochu, NTUC Fairprice and Hillsboro.

My view:  This is one of the REITs which Mapletree is bringing to the market. The Mapletree Industrial trust being the most recent REIT launched by the them prior to this. The yields are decent and share price is likely to be well supported but dont expect too much of  a fireworks. However, considering the good location of Vivocity being close to the Resort Worlds and the upcoming pipeline, it will something which investors can consider adding to its long term portfolio.

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